Disney’s password-sharing crackdown starts in June

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Disney is following Netflix’s steps in cracking down on password sharing between paying subscribers and freeloaders. And a new phase in the strategy is set to begin this June.

In an interview with CNBC this week, Disney CEO Bob Iger said the company intends to charge customers for sharing their Disney+ passwords with people outside their homes.

The feature will launch in a handful of countries—including the United States and Canada—in June before rolling out more broadly across the Disney+ service footprint in September.

Disney already has methods to curb password-sharing between subscribers and freeloaders: Disney+ and Hulu occasionally log out devices that appear connected to Internet networks beyond a subscriber’s immediate household.

Additionally, logging on to devices outside a designated home network requires receiving an email or text message with a six- or seven-digit code. `Additionally, logging on to devices outside a designated home network requires receiving an email or text message with a six- or seven-digit code. 

The party is officially over

Starting this summer, suspected freeloaders will be prevented from accessing Disney+ and Hulu entirely. They will be prompted to sign up for their accounts whenever they try to stream movies or TV shows from either service.

Subscribers will also be given the option of paying a separate fee to share their account beyond their home, though Disney has not offered any insight into how much that will cost.

Like other media and entertainment brands, Disney spent a lot of money building up its Disney+ streaming service and is in the process of spending even more money to buy Comcast’s stake in Hulu.

While Disney has several different businesses that can help cover the cost of operating Disney+ and Hulu, investors expect the company to generate revenue from each service independently.

Additionally, while Disney’s television networks continue to generate a large part of the company’s entertainment revenue, that money has come in a lot slower over the past few years as more people shift away from broadcast and cable TV in favor of streaming services.

When Disney and other entertainment giants had numerous ways to generate money — from traditional TV networks to streaming to theme parks and licensing deals — freeloaders were an afterthought.

In some ways, getting people used to streaming was seen as a positive thing at a time when it appeared clear that the shift to streaming was inevitable. These days, most people are comfortable getting their entertainment from streaming services. Disney is better positioned to capitalize on that shift now than several years ago.

Freeloaders are costing the company money — over $2 billion per year, according to one report — and that is lost money that publicly traded companies have a hard time justifying to investors.

So, Disney is doing what other publicly traded companies do: Encouraging freeloaders to get their own accounts.

Like other services, Disney has ad-supported plans on Disney+ and Hulu that are targeted to budget streamers who are willing to stream content with ads if it means they can pay less for the service (compared to ad-free plans, anyway).

Disney would prefer streamers pay for those ad-supported plans, too, since it means they bring in money twice from the same customer (once from the subscription, and again from the ads).

Streamers who don’t want to pay for Disney+ have a few options.

The first is to find someone with a Disney+ subscription who is willing to pay the extra fee to share their password beyond their home. This can be helpful for college students who want to use their parent or guardian’s subscription when they are studying away from home.

If Disney adopts the Netflix model, the secondary subscription should be priced lower than what it costs to pay for a separate account entirely — though we’ll have to wait until later this year to see how much Disney actually charges for the perk.

The second option is to download the ABC app for phones, tablets and smart TVs. While the ABC app doesn’t offer a lot of Disney content, it does offer some free, ad-supported streaming channels that include select shows from ABC and other Disney-owned networks.

ABC is constantly changing the free, ad-supported content streams, so it’s hard to say what will be offered at any given time — but, since the content is free, it’s better than nothing. Check out the latest free ABC content streams by visiting the ABC website here.

Your local library may provide access to Disney films and TV shows through DVDs, Blu-Ray discs, and streaming services like Hoopla and Kanopy.

Local library cards are usually free, but this can vary from branch to branch. Use the website LibraryFinder.org to locate your local library.

I previously wrote about free streaming options in my write-up on Max’s forthcoming password-sharing crackdown, which you can find here.

Most of the free options mentioned do not include Disney-owned films or TV series, since Disney has decided to keep most of its content for its own services — but there are still plenty of things to watch on free streaming platforms.

Tubi, a streaming service owned by Fox, offers shows and movies from Lionsgate, Warner Bros., A24 Films and more.

Pluto TV is another great option — it offers TV shows and movies from parent company Paramount, along with a curated selection of linear content streams from third parties like ABC News, NBC News, BBC Studios and FilmRise.

And, of course, there’s always YouTube, which has its own free film and TV section. You can see my full recommendation of free streaming TV options by clicking or tapping here. 

Have any thoughts on this? Drop us a line below in the comments, or carry the discussion to our Twitter or Facebook.

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Just a heads up, if you buy something through our links, we may get a small share of the sale. It’s one of the ways we keep the lights on here. Click here for more.